Tags: credit | suisse | stocks

Credit Suisse: Market Overbought for Now

By Dan Weil   |   Tuesday, 16 Jun 2009 11:36 AM

Bob Parker, vice chairman of Credit Suisse Asset Management, sees stock prices moving without direction in coming weeks, as economic stability is countered by several negative factors.

The probability of the market retreating to its March lows, however, is “very low,” he tells Bloomberg TV.

“I think for the rest of June and probably most of July, we are going to trade sideways or we may give up slightly some of the gains we’ve seen since early March.”

On the plus side, “the American economy, the U.K. economy will probably see positive growth in the third quarter this year,” Parker says. Emerging market economies are strong too.

“That’s the good news,” he says.

“The bad news is there is serious concern… particularly among the developed economies, that there are going to be a number of constraints on … recovery going into 2010.”

Those constraints include lower leverage in the banking system and more subdued consumer behavior, Parker says.

As far as the stock market goes, “there are a number of negative factors,” he says.

Technically, the market is overbought, Parker maintains. Rising commodity prices, particularly oil, also will limit stock gains, he says. So will the run-up in bond yields.

Some experts are more bullish than Parker.

"Anxiety is in the part of the people who have missed the rally," investment guru Laszlo Birinyi told CNBC.

"And they're trying to talk the market down, so that they can get back in.”

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Bob Parker, vice chairman of Credit Suisse Asset Management, sees stock prices moving without direction in coming weeks, as economic stability is countered by several negative factors.The probability of the market retreating to its March lows, however, is “very low,” he...
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